I purchased some very expensive put/call data yesterday to help alleviate my concerns about how Citigroup and Bank of America options may be skewing the put/call ratios. The data I purchased is dollar weighted put/call data, hence cheapie options have little effect on the data. Unfortunately, I am not certain if I am allowed to share a graph based on that data so I will err on the side of caution and not show the graph. However, I will describe the results.
Using a 10 day moving average we are currently getting a sell signal triggered only six other times this year. On 4 occasions we had pullbacks of at least 50 points on the S&P 500 and on two occasions we had smaller pullbacks of a couple of percent, but the market did pause for a while during those two other occasions. I will post a few more columns today looking at the other put/call ratios and evaluate how they worked this year and what they are saying now.
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